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HomeMy WebLinkAbout03-13-2013 Administration Agenda Package Wednesday, March 13, 2013 5:30 P.M. Orange County Sanitation District Administration Building Regular Meeting of the Board Room Administration Committee 10844 Ellis Avenue Fountain Valley, CA 714 593-7130 AGENDA PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the Clerk of the Board. Speakers are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: CONSENT CALENDAR: 1. Approve Minutes of the February 13, 2013, Administration Committee Meeting. 2. Recommend to the Board of Directors to: Adopt Resolution No. 13-XX, adopting a Conflict of Interest Code which supersedes all prior conflict of interest codes and amendments previously adopted. 3. A. Waive the one year prohibition in OCSD Personnel Policy 1.4 for James D. Ruth regarding retaining former employees as independent contractors or consultants; and B. Authorize the Board Chair to execute a Consulting Services Agreement with James D. Ruth effective April 1, 2013 for a three month term with the option for a three month extension (maximum six month term) at a cost of $10,000 per month. 0311 W13 Adainistation Committee Agenda Page 1 of 2 INFORMATION ITEMS: 4. Capital Improvement Program and Proposed User Fee Schedule 5. Proposed Update to FY 2013-14 District Budget 6. District Insurance Renewals, 2013-14 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee Meeting is scheduled for Wednesday, April 10, 2013. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at (714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Made E.Ayala Clerk of the Board (714)593-7130 mavala(d)ocsd.com For any questions on the agenda,Committee members may contact staff at: General Manager Jim Ruth (714)593-7110 imth(ctocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli(docsd.com Assistant General Manager Jim Herberg (714)593-7300 iherbem(Womd.com Director of Finance and Lorenzo Tyner (714)593-7550 Itwer((Domd.com Administrative Services Director of Human Resources Jeff Reed (714)593-7144 ireed((Docsd.com 0311 W13 Administration Committee Agenda Page 2 of 2 Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOO Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease FSSD Facilities Support Services Department gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District OOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration POTW Publicly Owned Treatment Works ppm Parts per million RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board Glossary of Terms and Abbreviations SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation Activated-sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved nutrients in the wastewater. Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system — In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP) — A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (DR) — the dilution at which the majority of the people detect the odor becomes the D(f for that air sample. Glossary of Terms and Abbreviations Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect'). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service (LOS)—Goals to support environmental and public expectations for performance. NOMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed. ADMINISTRATION COMMITTEE Meeting Date T1.1 III,. 03/13/13 3/27/13 AGENDA REPORT Item Number Item Number z Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Maria Ayala SUBJECT: CONFLICT OF INTEREST CODE GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 13-XX, adopting a Conflict of Interest Code which supersedes all prior Conflict of Interest Codes and amendments previously adopted. SUMMARY See attached General Counsel's memorandum dated March 5, 2013. PRIOR COMMITTEEIBOARD ACTIONS May 25, 2011 —Board amended the Conflict of Interest Code ADDITIONAL INFORMATION None CEQA N/A BUDGET/DELEGATION OF AUTHORITY LEVEL N/A ATTACHMENTS The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.com) with the complete agenda package: • General Counsel's Memorandum, March 5, 2013 (3 Pages) • Proposed Resolution No. OCSD 13-XX (2 Pages) • Conflict of Interest Code (6 pages) 902861.1 Return to Agenda Report INWOODRUFF SPRADLIN•SMART $55 ANTON•BOOLIYARO. SV.TF 1200 , COSTA MESA. CA 92626.76r0 (714)M-7000 MEMORANDUM TO: Chair and Members of the Board of Directors Orange County Sanitation District FROM: Bradley R. Hogin, Esq. DATE: March 5,2013 RE: Resolution Adopting the District's 2013 Conflict of Interest Code Summary The Political Reform Act requires that every local agency review its Conflict of Interest Code biennially. General Counsel recommends that the Board adopt the 2013 Conflict of Interest Code to reflect the following changes: • Addition and deletion of several positions, including the addition of positions on the Orange County Sanitation District Financing Corporation; • Changes to names under Designated Positions; • Addition and deletion of disclosure classifications; • Reorganization of Designated Positions by disclosure categories; and • Modification to disclosure requirements for certain positions to tailor disclosure categories to the type of economic interests that will foreseeably be materially affected by a designated employee's decision making. Discussion The Resolution adopting the District's 2013 Conflict of Interest Code revises the District's list of designated employees that are required to file statements of economic interests. The Resolution also revises the disclosure requirements to ensure disclosure of economic interests are narrowly tailored to the type of economic interests which may foreseeably be materially affected by decisions made by the designated employees. In addition, the changes include the addition of positions on the Orange County Sanitation District Financing Corporation,for positions involved in the making or participation in the making of decisions which may foreseeably have a material effect on any financial interest. W28M I Orange County Sanitation District Return to Agenda Report March 5, 2013 Page 2 Government Code section 87300 requires every public agency to adopt and promulgate a conflict of interest code covering all positions within the District (other than statutory filers) who make or participate in making decisions which may foreseeably have a material effect on any financial interest. Government Code Section 87309 provides: "No Conflict of Interest Code or amendment shall be approved by the code reviewing body or upheld by a court if it: (a) Fails to provide reasonable assurance that all foreseeable potential conflict of interest situations will be disclosed or prevented; (b) Fails to provide to each affected person a clear and specific statement of his duties under the Code; or (c) Fails to adequately differentiate between designated employees with different powers and responsibilities." Once a local agency has adopted a conflict of interest code, local agencies are required under Government Code section 87306.5 to review their codes, and if a change to the code is necessitated by changed circumstances,the local agency must submit an amended code. In 2011 and 2012, when the California Fair Political Practices Commission (FPPC) was considering changes to its gift regulations, the FPPC's General Counsel issued several memorandums opining that "conflict of interest code disclosure categories must be narrowly tailored to the type of economic interests that will foreseeably be affected by a designated employee's decisionmaking." (May 7, 2012, Memorandum from Zackery P. Mor=ini, General Counsel.) The FPPC's General Counsel also indicated that "requiring over-disclosure is a frequent problem in agency conflict of interest codes." (!d.) The FPPC's General Counsel noted "[c]ase law going back to before the Act was adopted makes it clear that financial disclosure laws must meet certain constitutional standards, and overbreath must be avoided." Two California Supreme Court cases provide guidance concerning financial disclosure laws. In City of Carmel-by-the Sea v. Young, (1970) 2 Ca1.3d 259 [Carmel], the Court found a financial disclosure law that required officials and candidates to disclose the nature and extent of investments in excess of $10,000, as well as those of his or her spouse and minor children, undertook an overbroad intrusion in the right of privacy and thereby impermissibly restricted the right to seek or hold public office or employment. Four years later,the Supreme Court in County of Nevada v. MacMillen, (1974) 11 Cal.3d 662, found a different financial disclosure law had been "specially tailored to meet and satisfy the primary concerns of the Carmel ruling." Specifically,the Court explained: "No effort is made to relate the disclosure to financial dealings or assets which might be expected to give rise to a conflict of interest; that is, to those having some rational connection with or bearing upon, or which might be affected by the functions or jurisdiction of any particular agency, whether statewide or local, or on the functions or jurisdiction of any particular public officer or employee." (!d at p. 671.) 9a s"A Orange County Sanitation District Return to Agenda Report March 5,2013 Page 3 With guidance from these Memorandums issued by FPPC's General Counsel, it is recommended that the proposed changes to the conflict of interest codes be adopted. These changes are necessary to ensure that disclosure requirements for certain positions are narrowly tailored to the type of economic interests that will foreseeably be materially affected by a designated employee's decision making. Additional changes are also proposed that update certain positions that have been added, deleted,or renamed. Recommendation General Counsel recommends that the Board adopt the 2013 Conflict of Interest Code to reflect the changes described herein. Upon adoption, the Code will be submitted to the County Board of Supervisors as the Code-reviewing body. 4rgdley R. Hogin General Counsel W38",1 Return to Agenda Report RESOLUTION NO. OCSD 13-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ADOPTING A CONFLICT OF INTEREST CODE WHICH SUPERSEDES ALL PRIOR CONFLICT OF INTEREST CODES AND AMENDMENTS PREVIOUSLY ADOPTED WHEREAS, the Political Reform Act of 1974, Government Code Section 81000 et. seq. ('the Act'), requires a local government agency to adopt a Conflict of Interest Code pursuant to the Act; and WHEREAS, the Orange County Sanitation District ("District') has previously adopted a Conflict of Interest Code and that Code now requires updating; and WHEREAS, amendments to the Act have in the past and foreseeably will in the future require conforming amendments to be made to the Conflict of Interest Code; and WHEREAS, the Fair Political Practices Commission has adopted a regulation, 2 California Code of Regulations, Section 18730, which contains terms for a standard model Conflict of Interest Code, which, together with amendments thereto, may be adopted by public agencies and incorporated by reference to save public agencies time and money by minimizing the actions required of such agencies to keep their codes in conformity with the Political Reform Act. NOW THEREFORE, BE IT RESOLVED: Section 1. The terms of 2 California Code of Regulations, Section 18730, any amendments to it duly adopted by the Fair Political Practices Commission, and all additional guidance by the Fair Political Practices Commission, are hereby incorporated by reference and, together with the 2013 Conflict of Interest Code for the Orange County Sanitation District, including Exhibits A and B in which Page 1 of 2 913801.1 Return to Agenda Report members and employees are designated and disclosure categories are set forth, constitute the Conflict of Interest Code of the Orange County Sanitation District. Section 2. The provisions of all Conflict of Interest Codes and Amendments thereto previously adopted by the Orange County Sanitation District are hereby superseded. Section 3. The Filing Officer is hereby authorized to forward a copy of this Resolution to the Clerk of the Orange County Board of Supervisors for review and approval by the Orange County Board of Supervisors as required by California Government Code Section 87303. PASSED AND ADOPTED at a regular meeting held March 27, 2013. Troy Edgar, Chair, Orange County Sanitation District ATTEST: Maria Ayala, Clerk of the Board Page 2 of 2 913801.1 Return to Agenda Report 2013 CONFLICT OF INTEREST CODE FOR THE ORANGE COUNTY SANITATION DISTRICT The Political Reform Act, Government Code Sections 81000, at seq., requires state and local government agencies to adopt and promulgate Conflict of Interest Codes. The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. Section 18730)which contains the terms of a standard Conflict of Interest Code, which may be incorporated by reference in an agency's code. After public notice and hearing, it may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730, any amendments to it duly adopted by the Fair Political Practices Commission, and all additional guidance by the Fair Political Practices Commission, are hereby incorporated by reference. This regulation and the attached Appendix designating officials and employees and establishing disclosure categories, shall constitute the Conflict of Interest Code of the Orange County Sanitation District. Designated employees shall file statements of economic interests with the District's Clerk of the Board who will make the statements available for public inspection and reproduction (Government Code Section 87500). Upon receipt of the statements of the Orange County Sanitation District Board of Directors, Orange County Sanitation District Financing Corporation, General Manager, General Counsel, Assistant General Manager, Director of Engineering, Director of Finance & Administrative Services, Director of Operations and Maintenance, Director of Facility Support Services, Director of Human Resources, and the Clerk of the Board, the Filing Officer shall make and retain a copy and forward Page 1 of 6 913806.1 Return to Agenda Report the original of these statements to the Clerk of the Orange County Board of Supervisors. Statements for all other designated employees will be retained by the Filing Officer. Page 2 of 6 913806.1 Return to Agenda Report EXHIBIT A ORANGE COUNTY SANITATION DISTRICT LIST OF DESIGNATED POSITIONS CONFLICT OF INTEREST CODE Disclosure Designated Positions Categories General Manager OC-01 Orange County Sanitation District Financing Corporation Board of OC-01 Directors General Counsel OC-01 Assistant General Manager OC-01 Director of Engineering OC-41 Director of Facility Support Services OC-41 Director of Finance &Administrative Services OC-41 Director of Human Resources new OC41 Director of Operations and Maintenance OC-41 Principal Accountant OC-41 Capital Improvement Program Project Management Supervisor OC41 Capital Improvement Program Project Manager OC41 Treasurer of the Orange County Financing Corporation OC41 Secretary of the Orange County Financing Corporation OC-05 Clerk of the Board OC-05 Controller OC-05 Engineering Manager OC-05 Environmental Compliance & Regulatory Affairs Manager OC-05 Facilities Manager OC-05 Public Affairs Manager OC-05 Environmental Laboratory & Ocean Monitoring Manager OC-05 Maintenance Manager OC-05 Operations Manager OC-05 Accounting Supervisor OC-05 Chief Plant Operator OC-05 Construction Inspection Supervisor OC-05 Senior Construction Inspection Supervisor OC-05 Engineering Supervisor OC-05 Maintenance Supervisor OC-05 Materials Control Supervisor OC-05 Operations Supervisor OC-05 Purchasing Supervisor OC-05 Contracts Supervisor OC-05 Safet & Health Supervisor OC-OS Bu er OC-05 Page 3 of 6 913806.1 Return to Agenda Report Senior Buyer OC-05 Contracts Administrator OC-05 Senior Contracts Administrator OC-05 Principal Contracts Administrator OC-05 Senior Engineer OC-05 Contracts and Purchasing Manager OC-05 Information Technology Manager OC-08 Information Technology Systems & Operations Manager OC-08 Information Technology Supervisor new OC-08 Construction Inspector OC-10 Senior Construction Inspector OC-10 Human Resources Supervisor OC-11 Risk Manager OC-12 Principal Financial Analyst OC-12 Laboratory Supervisor OC-21 Senior Scientist OC-21 Environmental Supervisor OC-29 Consultant OC-30 Page 4 of 6 913806.1 Return to Agenda Report EXHIBIT B ORANGE COUNTY SANITATION DISTRICT DISCLOSURE CATEGORIES CONFLICT OF INTEREST CODE Disclosure Category Disclosure Description OC-01 All interests in real property in Orange County or the District, as well as investments, business positions and sources of income (including gifts, loans and travel pa menu). OC-05 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that provide services, supplies, materials, machinery, equipment (including training and consulting services) used by the department or District, as applicable. OC-08 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that develop or provide computer hardware/software, voice data communications, or data processing goods, supplies, equipment, or services (including training and consulting services) used by the department or District, as applicable. OC-10 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that are engaged in any real estate activity including, but not limited to real estate appraisal, development, construction, planning/architectural design, engineering, sales, brokerage, leasing, lending, insurance, rights of way, and/or studies; and/or property or facilities management/maintenance/custodial and utility services as used by the department or provides capital for the purchase of property used or sold by Orange County or the District. OC-11 All interests in real property in Orange County or located entirely or partly within District boundaries, as well as investments in, business positions with and income (including gifts, loans and travel payments)from sources that are engaged in the supply of equipment related to (i) recruitment, employment search & marketing, classification, training, or negotiation withpersonnel; ii employee benefits; and iii health and welfare benefits. OC-12 All interests in real property in Orange County, as well as investments in, business positions with and income (including gifts, loans and travel payments)from sources that invest funds or engage in the business of insurance including, but not limited to insurance companies, carriers, holding companies, underwriters, brokers, solicitors, agents, adjusters, claims mangers and actuaries; from financial institutions including but not limited to, banks, savings & loan associations and credit unions or sources that have filed a claim, or have a claim pending, against Orange County. Page 5 of 6 913806.1 Return to Agenda Report EXHIBIT B ORANGE COUNTY SANITATION DISTRICT DISCLOSURE CATEGORIES CONFLICT OF INTEREST CODE Disclosure Cate o Disclosure Description OC-21 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that provide laboratory or chemical — related goods, supplies, equipment, or services (including trainin and consulting services) . OC-29 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that are subject to inspection or regulation by the department. OC-30 Consultants shall be included in the list of designated employees and shall disclose pursuant to the broadest category in the code subject to the following limitation: The Department Head/Director/General Manager/Superintendant/etc. may determine that a particular consultant, although a "designated position," is hired to perform a range of duties that is limited in scope and thus is not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultant's duties and, based upon that description, a statement of the extent of disclosure required. The determination of disclosure is a public record and shall be filed with the Form 700 and retained by the Filing Officer for public inspection. OC41 All interests in real property in Orange County or the District, as applicable, as well as investments in, business positions with and income (including gifts, loans and travel payments)from sources that provide services, supplies, materials, machinery, vehicles, or equipment (including training and consulting services) used by the department or District, as applicable. Page 6 of 6 913806.1 ADMINISTRATION COMMITTEE Needng Dare To ad.of Dir. 03,13,13 — AGENDA REPORT ern Number Item Number 3 Orange County Sanitation District FROM: Troy Edgar, Board Chair Originator: Jeff Reed, Director of Human Resources SUBJECT: CONSULTING SERVICES AGREEMENT FOR JAMES D. RUTH BOARD CHAIR'S RECOMMENDATION A. Waive the one year prohibition in OCSD Personnel Policy 1.4 for James D. Ruth regarding retaining former employees as independent contractors or consultants; and B. Authorize the Board Chair to execute a Consulting Services Agreement with James D. Ruth effective April 1, 2013 for a three month term with the option for a three month extension (maximum six month term) at a cost of $10,000 per month. SUMMARY James D. Ruth's ("Mr. Ruth") employment with OCSD will terminate effective April 1, 2013. It is recommended that the Administration Committee exercise its authority pursuant to Section 6.1.8 of OCSD Personnel Policy 1.4 to waive the one-year prohibition to retain Mr. Ruth as a consultant/independent contractor, as provided in Section 6.1.5 of OCSD Personnel Policy 1.4, and authorize the Board Chair to execute a Consulting Services Agreement with Mr. Ruth. The Agreement will take effect immediately upon termination (April 1, 2013) and continue for a minimum three month term, with an option to extend the Agreement for an additional three months (maximum six month term). The Agreement provides that Mr. Ruth will provide consulting services to OCSD concerning sewer service fees, labor negotiations, organizational structure and operational efficiencies, and other matters as may be required by the Board. PRIOR COMMITTEE/BOARD ACTIONS February 27, 2013 — Board authorized the Board Chair to provide notice of termination of employment to General Manager, James D. Ruth. ADDITIONAL INFORMATION Mr. Ruth has been employed with OCSD since 2005, and he has provided General Manager services for the District. As of April 1, 2013, Mr. Ruth's employment with OCSD as General Manager will terminate. In accordance with Resolution No. OCSD 07-04, Section 3.10 regarding the selection of specialized services, the Board of Directors desires to retain the consulting services of Mr. Ruth upon termination (April 1, 2013). Page 1 of 2 OCSD Personnel Policy 1.4 (Recruitment & Selection), Section 6.1.5, prohibits former employees from being retained as an independent contractor or consultant to provide service directly to OCSD for a period of one year after leaving OCSD employment. Section 6.1.8 of the policy also authorizes the Administration Committee to waive this prohibition if the Administration Committee determines it is in the best interest of OCSD to do so. It is proposed that the Administration Committee waive the one-year prohibition for retaining Mr. Ruth as a consultant because he possesses a unique set of knowledge, skills and abilities to advise and support OCSD on several major issues, including, but not limited to, sewer service fees, labor negotiations, organizational structure and operational efficiencies, and other matters as deemed necessary by the Board of Directors. The proposed term of the consulting services commences April 1, 2013 for a period of three months with the option to extend the term for an additional three months, if necessary. The compensation rate proposed for Mr. Ruth's services is $10,000 per month. The proposed Consulting Services Agreement is attached. CEQA N/A BUDGET/DELEGATION OF AUTHORITY COMPLIANCE The funds for these services will be derived from the OCSD Operating Budgets for FY 2012-13 and 2013-14. ATTACHMENTS The following attachment(s) are provided in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.com) with the complete agenda package: Proposed Consulting Services Agreement (5 Pages) Page 2 of 2 Return to Agenda Report CONSULTING SERVICES AGREEMENT THIS CONSULTING SERVICES AGREEMENT ("Agreement") is made and entered into by and between the ORANGE COUNTY SANITATION DISTRICT (hereinafter, "OCSD" or "Sanitation District"), a public agency, and James D. Ruth, an individual, (hereinafter referred to as "Consultant'), to be effective this 1st day of April 2013. OCSD and Consultant are sometimes hereinafter individually referred to as `Party" and are hereinafter collectively referred to as the "Parties" RECITALS A. The Sanitation District,by and through its Board of Directors, desires to retain the consulting services of James D. Ruth to provide advisory and support services concerning Sanitation District business, including, but not limited to, sewer service fees, labor negotiations, organizational structure and operational efficiencies, and other matters as may be required by the Board of Directors; and B. Based on Consultant's experience, knowledge, and skills, Consultant is uniquely qualified to perform these specialized services; and C. Consultant desires to provide the necessary consulting services to the Sanitation District and the Board of Directors pending completion of the sewer service fees, labor negotiations, and other matters as may be required by the Board of Directors; and D. The Sanitation District has adopted procedures in accordance with Resolution No. OCSD 07-04, Section 3.10, for the selection of specialized services and has proceeded in accordance with said procedures; and E. Pursuant to OCSD's Personnel Polices, Policy Number 1.4, section 6.1.8, on March 13, 2013, the Administration Committee of OCSD's Board of Directors determined that it is in the best interest of OCSD to waive the limitations of section 6.1.5 and to enter into this Agreement. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the Parties in carrying out the terms of this Agreement,it is mutually agreed as follows: 1.0 Retention 1.1 The Sanitation District hereby retains the services of Consultant to provide advisory and support services concerning Sanitation District business, including, but not limited to, sewer service fees, labor negotiations, organizational structure and operational efficiencies, and other matters as may be required by the Board of Directors, effective April 1, 20135 and Consultant hereby agrees to provide such consulting services for the Sanitation District as the Board of Directors deems appropriate. Return to Agenda Report 1.2 All services performed by Consultant, including but not limited to all drafts, data, correspondence, proposals, and reports, compiled or composed by the Consultant, pursuant to this Agreement, are for the sole use of the Sanitation District, its agents and employees. Neither the documents nor their contents shall be released to any third party without the prior written consent of the Sanitation District. This provision does not apply to information that (a) was publicly known, or otherwise known to the Consultant, at the time that it was disclosed to the Consultant by the Sanitation District, (b) subsequently becomes publicly known to the Consultant other than through disclosure by the Sanitation District Neither the documents nor their contents shall be released to any third party without the prior written consent of the Sanitation District. 2.0 Term of Agreement The term of this Agreement shall commence on April 1, 2013, and shall continue in full force and effect until July 1, 2013, unless sooner terminated with or without cause or notice by the Sanitation District or by Consultant, with no less than 30 calendar days' advanced written notice, provided in accordance with paragraph 13.2 herein. The Parties may extend this Agreement once for an additional three (3)month term by written amendment to this Agreement. 3.0 Compensation 3.1 Consultant will receive compensation at the flat rate of ten thousand dollars ($10,000) per month for all hours worked pursuant to this Agreement, payable in accordance with OCSD's established protocols and procedures used for all other consultants and contractors. Consultant shall not be entitled to any additional compensation or any severance pay upon termination of this Agreement. 3.2 Consultant's compensation set forth in Section 3.1 includes all hours worked and all time spent on OCSD related business, regardless of when performed, and includes travel to and from business related meetings. Consultant may not invoice OCSD for travel to and from home to OCSD, or work of a personal nature, even if performed while at OCSD and during regular business hours of OCSD. 3.3 Consultant shall not be entitled to receive any benefits of employment provided to OCSD's regular full-time or management employees, including, but not limited to, group health or medical benefits, life insurance,retirement, vacation and other leave accruals. 4.0 Hours of Work 4.1 Consultant's hours of work shall be established by Consultant based on the nature and amount of work to be performed as determined by the Board of Directors. 4.2 Consultant shall provide bi-weekly updates describing the nature of the services rendered pursuant to this Agreement. Such updates must be submitted to OCSD's General Manager, who shall review progress. Once submitted, evidence of the scheduled updates and associated documentation will be sent to OCSD's Accounting Department for review and Return to Agenda Report payment in accordance with the OCSD's established accounting practices for all other consultants and contractors. 5.0 General Expenses Consultant is not entitled to receive reimbursement for general expenses incurred in the performance of his duties pursuant to this Agreement Notwithstanding the foregoing, if Consultant incurs an extraordinary expense related to the performance of his obligations pursuant to this Agreement and wishes to seek reimbursement from the Sanitation District for such expense incurred, he must do so by submitting a request for reimbursement to the Board of Directors for approval. Any such request must be accompanied by a brief description of the expense and copies of receipts substantiating the expense. 6.0: Insurance 6.1 Consultant shall procure and maintain, at his sole cost and expense, and submit concurrently with his execution of this Agreement, in a form and content satisfactory to OCSD, Automobile liability insurance with limits of at least fifty thousand ($50,000) dollars per occurrence. 6.2 Insurance required herein shall be issued by a licensed company authorized to transact business in the state by the Department of Insurance for the State of California with a current rating of A-:VII or better (if an admitted carrier), or a current rating of A:X or better (if offered by a non-admitted insurer listed on the State of California List of Eligible Surplus Lines Insurers (LESLI),by the latest edition of A.M. Best's Key Rating Guide. 6.3 Consultant shall famish OCSD with both original certificates of insurance and endorsements affecting the coverage required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by OCSD before work commences. OCSD reserves the right to require Consultant's insurer to provide complete, certified copies of the required insurance policies at any time. 7.0: Other Terms and Conditions The Board of Directors, in consultation with the Consultant, shall fix any such other terms and conditions of services to be provided under this Agreement, as it may determine from time to time, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this Agreement, OCSD's resolutions and policies,or any other applicable law. 8.0: Independent Contractor OCSD regards the Consultant's services set forth herein as unique and specialized. It is agreed that Consultant shall act and be an independent contractor and not an employee of OCSD. Consultant shall be issued a Form 1099 consistent with his independent contractor status, and OCSD will not be responsible for any tax withholdings. Return to Agenda Report 9.0: Non-Liability of Board of Directors No member of the Board of Directors shall be personally liable to Consultant in the event of any default or breach by the Board, and or by OCSD, or for any amount, which may become due to Consultant. Consultant's compensation for the services rendered pursuant to this Agreement shall be solely an obligation of OCSD to the extent permitted by law. 10.0: Compliance with Law Consultant shall comply with all applicable laws, ordinances, codes, and regulations of federal, state, and local government in the performance of the duties and obligations that are the subject of this Agreement. 11.0 Governing Law and Venue This Agreement has been negotiated and executed in the State of California and shall be governed by and construed under the laws of the State of California. Any legal action arising under or related to this Agreement shall be brought and prosecuted in the Orange County Superior Court. 12.0 General Provisions 12.1 This Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations, arrangements, agreements,representations, and understandings, if any, made by or among the Parties with respect to the subject matter hereof. No amendments or other modifications of this Agreement shall be binding unless executed in writing by both Parties hereto,or their respective successors, assigns,or grantees. To the extent that other oral or written agreements exist or OCSD policies may apply to the relationship between OCSD and Consultant, this Agreement supersedes all others. 12.2 Any notices required by this Agreement shall be either given in person or mailed by first class mail with the postage prepaid and addressed as follows. IF TO OCSD: Orange County Sanitation District Attn: Clerk of the Board 10844 Ellis Avenue Fountain Valley, CA 92708 IF TO CONSULTANT: James D. Ruth [Address on File with HR Department] 12.3 If any provision, or any portion thereof, contained in this Agreement is held to be invalid or unenforceable, the remainder of this Agreement, or portion thereof, shall be deemed severed, shall not be affected and shall remain in full force and effect. 12.4 Any modification of this Agreement shall be effective only if it is in writing and signed by the parties. Return to Agenda Report IN WITNESS WHEREOF, this Agreement has been executed in the name of the SANITATION DISTRICT, by its officers thereunto duly authorized, and CONSULTANT effective as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT By Troy Edgar Date Chair, Board of Directors By Maria Ayala Date Clerk of the Board CONSULTANT By James D. Ruth Date ADMINISTRATION COMMITTEE Needng Date TO ad.Of Dir. 03/13/13 -- AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Jim Herberg, Assistant General Manager SUBJECT: PROPOSED SEWER SERVICE FEE SCHEDULE AND CAPITAL IMPROVEMENT PROGRAM GENERAL MANAGER'S RECOMMENDATION Informational only item. SUMMARY Staff will present the Capital Improvement Program and the proposed user fee schedule. PRIOR COMMITTEE/BOARD ACTIONS March 2013 Operations Committee: Staff presented the Capital Improvement Program and the proposed user fee schedule. February 2013 Operations Committee: Presentation on Proposed Rate Schedule Administration Committee: Consider a five year rate schedule for regional sewer service charges and industrial sewer service charges, which includes a 4.8% rate increase effective July 1, 2013, followed by four annual increases of 2.4%. Board Meeting: Set March 27, 2013, as the date of the Public Hearing to hear protests and for the second reading of the Ordinance No. OCSD41 and OCSD42. January 2013 Board Meeting: Receive and file the Sanitation District's Wastewater Revenue Program Rate Study completed by Carollo Engineers. December 2012 Board Meeting: Direct staff to prepare and mail Proposition 218 notifications outlining a Regional and Local sewer service fee schedule. Page 1 of 2 ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/DELEGATION OF AUTHORITY COMPLIANCE N/A Page 2 of 2 ADMINISTRATION COMMITTEE tdeedng Dare To ad.of Dir. 03/13/13 -- AGENDA REPORT Item Number Item Number s Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION Informational item regarding FY 2013-14 District Budget Update. SUMMARY For continued discussion on the development of the District's Proposed Update to the FY 2013-14 Budget, detail of the District's revenues has been provided below. The Proposed Budget Update will be presented for adoption at the June 26, 2013 Board meeting. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENTS The following attachment(s) are provided in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.com) with the complete agenda package: FY 2013-14 Budget Development Revenue Detail JDR:LT:MW:jf Page 1 of 4 Return to Agenda Report FY 2013-14 Budget Development Revenue Detail Revenue Summary (In millions) Category 2011-12 2012-13 2013-14 Actual Adopted Adopted Revenues: Service Fees 237.9 266.6 282.2 Permit User Fees 9.5 10.5 10.9 Capital Facility Capacity Charge 8.9 7.7 7.8 Property Taxes 67.9 64.0 64.0 Interest 15.7 12.1 14.8 Other Revenue 21.6 20.6 22.5 Debt Proceeds 0.0 0.0 0.0 Total Revenue $361.5 $381.5 $402.2 The District has a variety of revenue sources available for operating and capital expenses. The major revenue sources are as follows: • General Sewer Service Fees • Industrial Waste Permit User Fees • Capital Facilities Capacity Charges (CFCC) • Property Taxes • Interest Earnings • Other Miscellaneous Revenue • Debt Proceeds 2012.13 2013.14 General Service Fees— $261 $282.2M User fees are ongoing fees for service paid by customers connected to the sewer system. A property owner, or user, does not pay user fees until connected to the sewer system and receiving services. Once connected, a user is responsible for his share of the system's costs, both fixed and variable, in proportion to his demand on the system. These fees are for both Single Family Residences (SFR) and Multiple Family Residences (MFR). The Board approved FY 2012-13 single family residential rate (the underlying basis for all sewer rates) is $294. Staff is proposing a 4.8 percent rate increase in FY 2013-14 to$308. These rates are still well below the average annual sewer rate currently being charged throughout the state. Page 2 of 4 Return to Agenda Report 2012-13 2013-14 Industrial Waste Permit User Fees— $10.5M $10.9M Fees paid by large industrial and commercial properties owners connected to the sewer system. These fees are for the owner's share of the system's costs, both fixed and variable, in proportion to his demand on the system. Since the inception of the Permit User Fee program in 1970, users of the District's system that discharge high volumes or high strength wastewater have been required to obtain a discharge permit and pay extra fees for the costs of service. Capital Facilities Capacity Charges (CFCC)— $7.7M $7.8M Capital Facilities Capacity Charge is a one-time, non-discriminatory charge imposed at the time a building or structure is newly connected to the District's system, directly or indirectly, or an existing structure or category of use is expanded or increased. This charge pays for District facilities in existence at the time the charge is imposed, or to pay for new facilities to be constructed in the future, that are of benefit to the property being charged. Property Taxes— $64.0101 $64.011111 The County is permitted by State law (Proposition 13)to levy taxes at 1% of full market value (at time of purchase) and can increase the assessed value no more than 2% per year. The District receives a share of the basic levy proportionate to what was received in the 1976 to 1978 period less$3.5 million, the amount that represents the State's permanent annual diversion from special districts to school districts that began in 1992-93. The District's share of this revenue is dedicated for the payment of debt service. Interest Earnings— $12.1M $14.8M Interest earnings are generated from the investment of accumulated reserves consisting of a cash flow/contingency, a capital improvement, a renewal/replacement, and a self-insurance reserve. Other Revenue— $20.6M $22.5M Other revenue includes$14.6 million and $14.9 from the Irvine Ranch Water District(IRWD)for capital and equity charges and $4.5 million and $4.7 million for sewer services provided to the Santa Ana Watershed Protection Authority (SAWPA) and the Sunset Beach Sanitary District for FY 2012-13 and 2013-14, respectively. Page 3 of 4 Return to Agenda Report 2012-13 2013.14 Debt Proceeds— $0.0M $O.OM Certificates of Participation (COPS) are the District's primary mechanism for financing capital projects. COPS are repayment obligations based on a lease or installment sale agreement. COPS are viewed by the State of California as a share in an installment arrangement where the District serves as the purchaser. No new debt issuances are projected in the near-term. Financing If is necessary that the District utilize debt financing to meet its total obligations and to meet projected construction schedules, the District uses long-term borrowing (Certificates of Participation (COP)) for capital improvements that cannot be financed from current revenue. Before any new debt is issued, the impact of debt service payments on total annual fixed costs is analyzed. No new debt issuance is currently being planned. The District Maintains its AAA Rating The District maintains ratings of"AAA" from Standards and Poor and "AA" from Fitch. A triple A rating is the highest obtainable for any governmental agency. In order to maintain this rating, the District adheres to its 2001 Debt Policy and coverage ratios requirements. This Board- adopted policy serves as the agency's guide in the management of existing debt and in the issuance of future debt. OCSD Has Contractual Covenants The District does have contractual covenants within the existing COP agreements which require minimum coverage ratios of 1.25. The minimum coverage ratio is the ratio of net annual revenues available for debt service requirements to total annual debt service requirements for all senior lien COP debt. The coverage ratio for senior lien COP debt was approved at 2.76 and 2.45 for FY 2012-13 and 2013-14, respectively. Page 4 of 4 ADMINISTRATION COMMITTEE Needng Date To ad.of Dir. 03/13/13 -- AGENDA REPORT Item Number Item Number 6 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance &Administrative Services SUBJECT: Status of 2013-14 Insurance Renewals GENERAL MANAGER'S RECOMMENDATION Informational only. SUMMARY Historically, the Administration Committee has asked for status updates regarding the renewals of major insurance policies each year. The Risk Management Division and the Sanitation District's operational insurance broker begin the process of renewal each January, and final quotes are typically received in June shortly before the beginning of the new fiscal year. The Sanitation District budget provides funds for the renewal of the following four major insurances for the operations: 1) Excess General Liability Insurance 2) Excess Workers' Compensation 3) All-Risk Property and Flood insurance 4) Boiler& Machinery Insurance PRIOR COMMITTEE/BOARD ACTIONS June 2012 - The Board approved renewal of the above four policies for the period July 1, 2012 through June 30, 2013. ADDITIONAL INFORMATION 1) Excess General Liability Insurance Program The Sanitation District's Excess General Liability Insurance Program is currently provided through the California Municipal Excess Liability Program (CAMEL) and its sister program, the Alliant National Municipal Liability Program (ANML). The Sanitation District has participated in the CAMEL program since FY 1996-97. Page 1 of 4 ADDITIONAL INFORMATION (cont'd) This program currently provides the Sanitation District with a $30 million policy of comprehensive coverage for municipal liability, bodily injury and property damage, and personal injury. The program was structured to also include Employment Practices, and Public Officials Errors & Omissions coverage. The $30 million coverage has a self-insured deductible of $250,000 per occurrence and $500,000 deductible for employment practices claims. Since 1997, the Employment Practices portion of coverage has been enhanced from a $2 million sub-limit to the full $30 million policy limit. The actual insurance coverage currently consists of two separate layers. The first layer is the "Basic" $10 million program with self-insured retention of $250,000. The second layer consists of $20 million of coverage in excess of the first layer of $10 million. The premium for 2012-13 was $356,540, higher than the premiums for 2010-11 and 2011-12, but lower than the premiums paid during the years 2003-10. 2) Excess Workers' Compensation Insurance The Excess Workers' Compensation insurance coverage is with the California State Association of Counties Excess Insurance Authority (CSAC EIA). The Sanitation District has participated in this program or its predecessor since 2003. Excess Workers' Compensation Program currently provides so-called "Statutory" (unlimited) coverage with a self-insured retention (SIR), or deductible, of$750,000. The use of Excess Workers' Compensation Insurance dates back to the late 1980's. At that time, the Fiscal Policy Committee approved an SIR, or deductible, of $250,OOO, for such coverage. Due to the hardening of the workers' compensation market, this deductible was raised to $500,000 beginning in FY 2002-03 through a policy with Employers Reinsurance Corporation (ERC) that provided coverage at the time of $25 million with a self-insured retention (SIR), or deductible of$500,000. Some additional risk may be associated with the CSAC EIA joint powers authority in that a premium surcharge can be assessed to individual members if an unusually large number of losses were to occur outside of the actuarial evaluation estimates. However, historically the CSAC EIA premiums for excess workers compensation have been so much less than competing quotes available to the Sanitation District that if even there were a surcharge, the cost might still continue to be cheaper. The renewal of the Excess Workers' Compensation Insurance for the period July 1, 2012 through June 30, 2013 was at a rate of .002732 (higher than the previous year's rate of .00247 but lower than the year before of .002763). This premium rate generated an estimated premium of approximately $172,000 based on the estimated Page 2 of 4 ADDITIONAL INFORMATION (cont'd) 2012-13 payroll. Since the premium itself is based on final payroll, the Sanitation District will not know the exact final premium until the year is over. 3) All-Risk Property and Flood Insurance All-Risk Property and Flood Insurance Program (Property Insurance) provides for comprehensive coverage for most of the Sanitation District's real and personal property regarding virtually all perils including fire, flood, and business interruption. The Sanitation District previously carried earthquake insurance as part of its Property Insurance, but in the last few years earthquake insurance has been impossible to obtain or not cost-effective. Currently, the Sanitation District has earthquake insurance only in connection with some of its buildings under construction. Current Property Insurance limits are $1 billion for most perils other than flood and earthquakes, and $300 million for flood, with many sub-limits for various situations. In order to reach $1 billion in limits, the broker had to arrange for nearly a dozen different layers of insurers. The SIR is $250,000 per occurrence for most types of losses. Since the late 1990's, the Property Insurance has been with a nationwide joint purchase property insurance program called Public Entity Property Insurance Program (PEPIP), one of the world's largest property programs. It is important to note that this joint purchase property insurance program offers the purchasing power of numerous large public entities without the pooling or sharing of coverage or losses. The renewal of All-Risk Property and Flood Insurance for the period July 1, 2012 through June 30, 2013 was at a premium of $523,621, an increase of 16.5% due partly to the cost of adding newly-finished construction to the list of insured structures. This number is, however, much lower than the $700,000+ paid during several years in the early and mid-2000's. 4) Boiler& Machinery Insurance The Boiler & Machinery Insurance Program provides comprehensive coverage for loss caused by machinery breakdown and explosion of steam boilers or other covered process equipment, including damage to the equipment itself and damage to other property caused by covered accident. The current Boiler & Machinery Insurance Program provides coverage ($100 million per occurrence with deductibles ranging from $25,000 to $350,000) for losses caused by covered machinery breakdown (e.g., motors, steam turbines, digesters, co-gen engines). Damages to the equipment, as well as damages to other property Page 3 of 4 ADDITIONAL INFORMATION (cont'd) and improvements caused by the machinery breakdown, are covered by the Boiler & Machinery Insurance. This program augments the Sanitation District's All-Risk Property Insurance that covers perils such as fire and flood. The renewal of the Boiler & Machinery Insurance Program for the period July 1, 2012 through June 30, 2013 was at $18,571. As with the Property Insurance, this number is higher than last year but lower than during some of the years in the early and mid-2000's. CEQA N/A BUDGET/DELEGATION OF AUTHORITY COMPLIANCE N/A Page 4 of 4